Ireland’s New AIF Rulebook: Key Changes For Fund Finance

On 5 May 2026, the Central Bank of Ireland (“CBI”) finalised its comprehensive updates and enhancements to Ireland’s regulatory framework for alternative investment funds (“AIFs”), including removing restrictions on third-party guarantees and aligning Irish rules with AIFMD 2.0.

This forms part of the August 2026 Edition of FUNDed

Key Takeaways

• QIAIFs can now provide third-party guarantees and cross-collateralisation, enabling more efficient fund group financing structures.
• Ireland’s loan origination framework now aligns with AIFMD 2.0, placing it on a level playing field with other leading EU jurisdictions.
• The AIF Rulebook expressly accommodates common private fund features such as capital commitments, side letters and carried interest arrangements.

AIFMD 2.0

The reforms coincide with the publication of the Irish statutory instrument¹ implementing AIFMD 2.0, which came into effect on 1 May 2026.

The CBI’s reforms are designed to align the Irish domestic regulatory framework with AIFMD 2.0, but also to adopt recommendations from industry and government, and to ensure consistency with broader EU policy initiatives such as the Savings and Investment Union.

The revised AIF Rulebook represents a significant modernisation, simplification and clarification of the Irish rules governing Qualifying Investor AIFs (“QIAIFs”), Retail Investor AIFs and European Long-Term Investment Funds (ELTIFs).

The key changes from a fund finance perspective are summarised below.

Removal of Restrictions on Third-Party Guarantees

The major enhancement for fund financing confirmed in the new rules is the removal of certain restrictions on the ability of QIAIFs to provide guarantees for third-party obligations and to support financing arrangements beyond their own assets.

Under the previous AIF Rulebook, QIAIFs were limited in giving guarantees or providing security for the obligations of any third party other than their wholly-owned subsidiaries, except in certain circumstances where the QIAIF had an economic interest in the borrower. This meant, for example, that in subscription line transactions where an Irish feeder fund or the ultimate borrower fund was required to provide security or a guarantee to a lender, a cascading security structure had to be used: the Irish fund provided security for its own direct obligations, with the right to that security then assigned down the chain to the lender.

The removal of this restriction enables more efficient cross-entity and group arrangements in line with international fund finance structures, where guarantees and cross-collateralisation across fund groups are commonplace.

It will now be more straightforward for fund managers to put in place financing arrangements within fund groups, including those involving multiple layers of financing across different vehicles (for example, by having a QIAIF guarantee borrowings incurred at the level of a direct or indirect master fund, an intermediate or aggregator vehicle or parallel fund).

Direct Lending Funds

The CBI has removed its legacy domestic regime for loan-originating QIAIFs and will align instead with the corresponding loan origination framework under AIFMD 2.0.

This now ensures that Ireland is on a level regulatory playing field with other leading EU domiciles of direct lending funds, and that both EU and non-EU managers and sponsors will be able to avail of a broader range of private credit strategies using both the ICAV and ILP vehicles.

Greater Structuring Flexibility for Private Funds

The AIF Rulebook now incorporates industry practice and guidance and expressly provides for a variety of features commonly used by private funds such as private equity and venture capital funds. These include capital commitments, side letters, differentiated investor participation (including excuse and exclude rights), and management participation for carried interest purposes.

Use of Intermediate Investment Vehicles

The CBI has removed its prescriptive rules on wholly-owned subsidiaries of QIAIFs. The revised AIF Rulebook now provides that where a QIAIF invests through intermediate investment vehicles (including SPVs, aggregators, subsidiaries or co-investment vehicles), prospectus disclosure should be made regarding the use of such vehicles. The CBI expects appropriate due diligence by the AIFM prior to investment and that the AIFM has documented policies and procedures in place for active monitoring (in line with AIFMD requirements).

When Do the New Rules Take Effect?

The updated AIF Rulebook is effective immediately. New financing arrangements, or existing arrangements being renegotiated, can now take advantage of the greater flexibility.

Footnote

1. https://www.irishstatutebook.ie/eli/2026/si/181/made/en/print